REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of September5, 1995,
between TIME WARNER INC., a Delaware corporation (the "Company"), Itochu
Corporation, a corporation organized under the laws of Japan ("Itochu"),
and Itochu Entertainment Inc., a Delaware corporation ("Itochu
Entertainment"). Itochu and Itochu Entertainment are referred to
collectively as the "Stockholders" and individually as a "Stockholder."
This Agreement is made pursuant to Section5.2(e) of the
Restructuring Agreement, dated as of August 31, (as such agreement may be
amended from time to time, the "Restructuring Agreement"), among the
Stockholders and the Company. In order to induce the Stockholders to
consummate the transactions contemplated by the Restructuring Agreement,
and in further consideration therefor, the Company has agreed to execute
and deliver this Agreement and provide the registration rights set forth
in this Agreement.
Accordingly, it is hereby agreed as follows:
1. DEFINITIONS. Capitalized terms used but not otherwise
defined herein shall have the meanings assigned to such terms in the
Restructuring Agreement. For purposes of this Agreement, the following
terms shall have the following meanings:
"BLACKOUT PERIOD" means any Section 6(a) Period and any Section
6(b) Period.
"COUNSEL TO THE HOLDERS" means the single law firm from time to
time representing the Holders, as appointed by the Holders of a majority
in number of the Registrable Securities.
"DESIGNATED SHELF REGISTRATION" has the meaning specified in
Section 4(b).
"EFFECTIVE PERIOD" means a period commencing on the date of
this Agreement and ending on the earliest of (i)the first date as of
which all Registrable Securities cease to be Registrable Securities and
no Holder holds any shares of TWX Preferred Stock and (ii) the eighth
anniversary of the date of the Closing Date.
"HOLDER" means (i) either Stockholder or any Affiliate of
either Stockholder that is a holder of Registrable Securities or TWX
Preferred Stock and (ii) each Person that is a registered holder of
Registrable Securities
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or TWX Preferred Stock that (A) acquired such Registrable Securities
or TWX Preferred Stock in accordance with Section 8.1 of the
Restructuring Agreement and (B) received or will receive certificates
for Registrable Securities bearing a legend pursuant to Section
8.3 of the Restructuring Agreement; PROVIDED, HOWEVER, that, if
such Person is not a Stockholder, such Person has agreed in writing to
become a Holder hereunder and to be bound by the terms and conditions of
this Agreement.
"NASD" means the National Association of Securities Dealers,
Inc.
"PROSPECTUS" means the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with
respect to the terms of the offering of any portion of the Registrable
Securities covered by any Registration Statement and by all other
amendments and supplements to the prospectus, including post-effective
amendments and all material incorporated by reference in such prospectus.
"REGISTRABLE SECURITIES" means, collectively, (i)the shares of
TWX Common Stock issued pursuant to the conversion or exchange provisions
of the TWX Preferred Stock issued pursuant to Section 1.1 of the
Restructuring Agreement (the securities referred to in (i) are the
"Shares") and (ii) any securities paid, issued or distributed in respect
of any Shares by way of stock dividend or distribution or stock split or
in connection with a combination of shares, recapitalization,
reorganization, merger, consolidation or otherwise. Securities will
cease to be Registrable Securities in accordance with Section 2 hereof.
"REGISTRATION EXPENSES" means any and all expenses incident to
performance of or compliance with this Agreement, including, without
limitation, (i) all SEC, NASD and securities exchange registration and
filing fees, (ii)all fees and expenses of complying with state
securities or blue sky laws (including fees and disbursements of counsel
for any underwriters in connection with blue sky qualifications of the
Registrable Securities), (iii) all printing, messenger and delivery
expenses, (iv)all fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange pursuant
to Section 7(h), (v) the fees and disbursements of counsel for the
Company and of its independent public accountants, (vi) the reasonable
fees and expenses of any special experts retained in connection with the
requested registration and (vii) the reasonable fees and expenses of
Counsel to the Holders, but excluding (x)underwriting discounts and
commissions and transfer
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taxes, if any, and (y) any fees or disbursements of counsel to the
Holders or any Holder (other than Counsel to the Holders).
"REGISTRATION STATEMENT" means any registration statement
(including a Shelf Registration) of the Company referred to in Section 3
or 4, including any Prospectus, amendments and supplements to any such
registration statement, including post-effective amendments, and all
exhibits and all material incorporated by reference in any such
registration statement.
"RELATED SECURITIES" means any securities of the Company
similar or identical to any of the Registrable Securities, including,
without limitation, TWX Common Stock and all options, warrants, rights
and other securities convertible into, or exchangeable or exercisable
for, TWX Common Stock.
"SALE PERIOD" has the meaning specified in Section4(b).
"SECTION 6(A) PERIOD" has the meaning specified in Section
6(a).
"SECTION 6(B) PERIOD" has the meaning specified in Section
6(b).
"SHELF REGISTRATION" means a "shelf" registration statement on
an appropriate form pursuant to Rule 415 under the Securities Act (or any
successor rule that may be adopted by the SEC).
"UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING" shall mean
an underwritten offering in which securities of the Company are sold to
an underwriter for reoffering to the public.
2. SECURITIES SUBJECT TO THIS AGREEMENT. The securities
entitled to the benefits of this Agreement are the Registrable
Securities. For the purposes of this Agreement, Registrable Securities
will cease to be Registrable Securities when and to the extent that (i)a
Registration Statement covering Registrable Securities shall have been
declared effective under the Securities Act and Registrable Securities
have been disposed of pursuant to such effective Registration Statement,
(ii)Registrable Securities shall have been distributed to the public
pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act, (iii)Registrable Securities shall have been otherwise
transferred to a party that is not an Affiliate of the transferor
Stockholder and new certificates for such Registrable Securities not
bearing
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the legend specified in Section 8.2 of the Restructuring Agreement
shall have been delivered by the Company, (iv)the Effective Period
shall have ended or (v)Registrable Securities shall have ceased to
be outstanding.
3. PIGGY-BACK REGISTRATION RIGHTS.
(a)Whenever during the Effective Period the Company
shall propose to file a registration statement under the Securities Act
relating to the public offering of TWX Common Stock for cash pursuant to
a firm commitment underwritten offering (other than pursuant to a
registration statement on Form S-4 or Form S-8 or any successor forms, or
filed in connection with an exchange offer or an offering of securities
solely to existing stockholders or employees of the Company), for sale
for its own account, the Company shall (i)give written notice at least
ten Business Days prior to the filing thereof to each Holder of
Registrable Securities then outstanding, specifying the approximate date
on which the Company proposes to file such registration statement and
advising such Holder of his right to have any or all of the Registrable
Securities then held by such Holder included among the securities to be
covered thereby and (ii)at the written request of any such Holder given
to the Company at least two Business Days prior to the proposed filing
date, include among the securities covered by such registration statement
the number of Registrable Securities which such Holder shall have
requested be so included (subject, however, to reduction in accordance
with paragraph(b) of this Section). The Company shall use its
commercially reasonable efforts to cause the managing underwriter of the
proposed underwritten offering to permit the Holders of Registrable
Securities requested to be included in the Registration Statement for
such offering to include such securities in such offering on the same
terms and conditions as any similar securities of the Company included
therein.
(b) Each Holder of Registrable Securities desiring to
participate in an offering pursuant to Section 3(a) may include shares of
TWX Common Stock in any TWX Registration Statement relating to such
offering to the extent that the inclusion of such shares of TWX Common
Stock shall not reduce the number of shares of TWX Common Stock to be
offered and sold by the Company pursuant thereto. If the lead managing
underwriter selected by the Company for an underwritten offering pursuant
to Section3(a) determines that marketing factors require a limitation on
the number of shares of TWX Common Stock to be offered and sold by the
stockholders of the Company in such offering, there shall be included in
the offering only that number of shares of TWX Common Stock, if any, that
such lead managing underwriter reasonably and in good faith believes will
not jeopardize
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the success of the offering of all the shares of TWX Common Stock
that the Company desires to sell for its own account. In such
event and provided the lead managing underwriter has so notified the
Company in writing, the number of shares of TWX Common Stock to be
offered and sold by stockholders of the Company, including Holders of
Registrable Securities, desiring to participate in such offering shall be
allocated among such stockholders of the Company on a pro rata basis
based on their holdings of TWX Common Stock (subject to any written
agreements requiring a different priority).
(c) Nothing in this Section 3 shall create any liability
on the part of the Company to the Holders of Registrable Securities if
the Company for any reason should decide not to file a registration
statement proposed to be filed under Section 3(a) or to withdraw such
registration statement subsequent to its filing, regardless of any action
whatsoever that a Holder may have taken, whether as a result of the
issuance by the Company of any notice hereunder or otherwise.
(d) A request by Holders to include Registrable
Securities in a proposed underwritten offering pursuant to Section 3(a)
shall not be deemed to be a request for a demand registration pursuant to
Section 4.
4. DEMAND REGISTRATION RIGHT.
(a)Upon the written request of Holders of at least 25%
of the Registrable Securities that the Company effect the registration
with the SEC under and in accordance with the provisions of the
Securities Act of all or part of such Holder's or Holders' Registrable
Securities and specifying the aggregate number of shares of Registrable
Securities requested to be registered and the name or names of the
proposed managing underwriter or underwriters (or in the case of a
Designated Shelf Registration, the intended method of distribution and
the name or names of any managing underwriters or agents), the Company
will use all commercially reasonable efforts to file a Registration
Statement covering such Holder's or Holders' Registrable Securities
requested to be registered within 20 Business Days after receipt of such
request for disposition pursuant to an underwritten offering (or, in the
case of a Designated Shelf Registration, the intended method of
distribution) (the terms of such underwritten offering or other
distribution to be determined by the Holders of a majority of the
Registrable Securities so requested to be registered); PROVIDED, HOWEVER,
that the Company shall not be required to take any action pursuant to
this Section 4:
Page 6
(1) if prior to the date of such request the Company
shall have effected three (3) registrations pursuant to this Section
4;
(2) if the Company has effected a registration (other
than a Designated Shelf Registration) pursuant to this Section 4
within the 120-day period immediately preceding such request which
permitted Holders of Registrable Securities to register Registrable
Securities;
(3) if the Company shall at the time have effective a
Shelf Registration pursuant to which the Holder or Holders that
requested registration could effect the disposition of such Holder's
or Holders' Registrable Securities in the manner requested;
(4) if the Registrable Securities which the Company
shall have been requested to register shall have a then current
market value of less than $50,000,000, unless such registration
request is for all remaining Registrable Securities; or
(5) during the pendency of any Blackout Period;
PROVIDED FURTHER, HOWEVER, that the Company shall be permitted to satisfy
its obligations under this Section 4(a) by amending (to the extent
permitted by applicable law) any registration statement (including any
Shelf Registration) previously filed by the Company under the Securities
Act so that such registration statement (as amended) shall permit the
disposition (in accordance with the intended methods of disposition
specified as aforesaid) of all of the Registrable Securities for which a
demand for registration has been made under this Section 4(a). If the
Company shall so amend a previously filed registration statement, it
shall be deemed to have effected a registration for purposes of this
Section 4.
(b) The holders of a majority in number of the
Registrable Securities shall be entitled to specify in a request that one
registration that is effected pursuant to this Section 4 shall be for a
Shelf Registration (a "Designated Shelf Registration"). Subject to any
Blackout Period, a Designated Shelf Registration shall be available for
sales of Registrable Securities during the 15 Business Day period
beginning on the third Business Day after the Company's public
announcement of its quarterly or year-end financial results (each a "Sale
Period"); PROVIDED, HOWEVER, that dispositions pursuant to this Section
4(b), together with all other sales made in accordance with the volume
and manner of sale limitations of rule 144(e) and (f) under the
Page
Securities Act within the same three month period, shall not exceed 1% of
the outstanding shares of TWX Common Stock as reported on the Company's
most recent Form 10-K or 10-Q, as applicable. Notwithstanding the
foregoing, if a Blackout Period or a suspension by the Company of the use
by the Holders of the Designated Shelf Registration or any related
Prospectus pursuant to Section 7(e), eliminates more than seven Business
Days in any Sale Period, then (i)the length of the next Sale Period
shall be thirty Business Days and (ii) the volume restriction specified
in the preceding sentence shall be 2% of the outstanding shares of TWX
Common Stock for the three month period which includes such extended Sale
Period. Notwithstanding the provisions of Section 7(b), the Company
shall be required to maintain the effectiveness of the Designated Shelf
Registration for at least 36 calendar months (which period shall be
extended if necessary to cover any and all extended Sale Periods provided
for under the immediately preceding sentence), or, if earlier, until all
Registrable Securities covered thereby have ceased to be Registrable
Securities.
(c) A registration requested pursuant to this Section 4
shall not be deemed to be effected for purposes of this Section 4 if it
has not been declared effective by the SEC or become effective in
accordance with the Securities Act and the rules and regulations
thereunder.
(d) Holders of a majority in number of the Registrable
Securities to be included in a Registration Statement pursuant to this
Section 4 may, at any time prior to the effective date of the
Registration Statement relating to such registration, revoke such request
by providing a written notice to the Company revoking such request. The
Holders of Registrable Securities who revoke such request shall reimburse
the Company for all its out-of-pocket expenses incurred in the
preparation, filing and processing of the Registration Statement;
PROVIDED, HOWEVER, that, if such revocation was based on (x) the
Company's failure to comply in all material respects with its obligations
hereunder or (y) the occurrence of a Blackout Period, such reimbursement
shall not be required and the remaining provisions of this Section 4(d)
shall not apply. If such reimbursement is made within 10 Business Days
following a request therefor, such registration shall not be deemed to
have been effected for purposes of this Section 4. If such reimbursement
is not so received within such time (i) such registration shall be deemed
to have been effected for purposes of this Section 4 and (ii) the Company
shall have no further obligations to such Holders with respect to
piggyback registrations pursuant to Section 3 or demand registrations
pursuant to this Section 4 until such reimbursement is made.
Page 8
(e) The Company will not include any securities which are
not Registrable Securities in any Registration Statement filed pursuant
to a demand made under this Section 4 without the prior written consent
of the Holders of a majority in number of the Registrable Securities
covered by such Registration Statement.
5. SELECTION OF UNDERWRITERS. In connection with any
underwritten offering pursuant to a Registration Statement filed pursuant
to a demand made pursuant to Section 4, Holders of a majority in number
of the Registrable Securities to be included in the Registration
Statement shall have the right to select a managing underwriter or
underwriters to administer the offering, so long as such managing
underwriter or underwriters shall be reasonably satisfactory to the
Company; PROVIDED, HOWEVER, that the Company shall have the right to
select one co-managing underwriter, so long as such co-managing
underwriter shall be reasonably satisfactory to Holders of a majority in
number of the Registrable Securities to be included in the Registration
Statement. The managing underwriter or underwriters selected by the
Holders of a majority in number of the Registrable Securities to be
registered shall be deemed satisfactory to the Company unless the Company
sends a written notice of objection to such Holders within 10 days of
receipt of notice from such Holders of the appointment of a managing
underwriter or underwriters and the co-managing underwriter selected by
the Company shall be deemed to be satisfactory to the Holders of a
majority in number of the Registrable Securities to be included in the
Registration Statement unless such Holders send a written notice of
objection to the Company within 10 days of receipt of notice from the
Company of the appointment of a co-managing underwriter.
6. BLACKOUT PERIODS FOR HOLDERS.
(a)If the Company determines in good faith that the
registration and distribution of Registrable Securities (or the use of
the Registration Statement or related Prospectus) would interfere with
any pending financing, acquisition, corporate reorganization or any other
corporate development involving the Company or any of its subsidiaries or
would require premature disclosure thereof and promptly gives the Holders
of Registrable Securities written notice of such determination, the
Company shall be entitled to (i) postpone the filing of the Registration
Statement otherwise required to be prepared and filed by the Company
pursuant to Section3 or 4 or (ii) elect that the Registration Statement
not be used, in either case, for a reasonable period of time, but not to
exceed 90 days (a "Section 6(a) Period"). Any such written notice shall
be signed by an officer of the Company and contain a
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general statement of the reasons for such postponement or restriction on use
and an estimate of the anticipated delay. The Company shall promptly notify
each Holder of the expiration or earlier termination of a Section 6(a) Period.
(b) If (i)during the Effective Period, the Company shall
file a registration statement (other than in connection with the
registration of securities issuable pursuant to a continuous "at the
market offering" pursuant to Rule 415(a)(4) under the Securities Act, an
employee stock option, stock purchase, dividend reinvestment plan or
similar plan or pursuant to a merger, exchange offer or a transaction of
the type specified in Rule 145(a) under the Securities Act) with respect
to any Related Securities and (ii)with reasonable prior notice, (A)the
Company (in the case of a non-underwritten offering pursuant to such
registration statement) advises the Holders in writing that a sale or
distribution of Registrable Securities would adversely affect such
offering or (B)the managing underwriter or underwriters (in the case of
an underwritten offering) advise the Company in writing (in which case
the Company shall notify the Holders), that a sale or distribution of
Registrable Securities would adversely affect such offering, then each
Holder of Registrable Securities shall, to the extent not inconsistent
with applicable law, refrain from effecting any sale or distribution of
Registrable Securities, including sales pursuant to Rule 144 or Rule 144A
under the Securities Act, during the 10-day period prior to, and during
(x) the 60-day period, in the case of sales or distributions pursuant to
a Designated Shelf Registration or pursuant to Rule 144 or Rule 144A
under the Securities Act, and (y) the 90-day period, in all other cases,
in each case beginning on the effective date of such registration
statement (a "Section 6(b) Period").
(c) The Effective Period and, in the case where the use
of an effective Registration Statement (other than a Designated Shelf
Registration) is prohibited under Section 6(a), the period for which a
Registration Statement shall be kept effective pursuant to Section 7(b),
as the case may be, shall be extended by a number of days equal to the
number of days of any Blackout Period occurring during such period
(except that, in the case of the occurrence of a Blackout Period during
the effectiveness of a Designated Shelf Registration, the Effective
Period will only be extended to the extent, if any, necessary to comply
with Section 4(b)). Except as provided below, the beginning of any
Blackout Period shall be at least 120 days after the end of the prior
Blackout Period and the aggregate number of days included in all Blackout
Periods during any consecutive 12 month period during the Effective
Period shall not exceed 180 days; PROVIDED, HOWEVER, that once during any
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consecutive 12 month period during the Effective Period a Section 6(b)
Period may begin on or within five days of the last day of a Section 6(a)
Period.
(d) Without limiting the rights of the Company under
Section 6(a), unless the Company shall exercise its right to declare a
Section 6(b) Period prior to the 10th day preceding the effectiveness of
a Registration effected pursuant to Section 4 (other than a Designated
Shelf Registration), it shall not, during the period beginning on such
10th day and continuing during the period of the offering covered by such
Registration Statement (other than a Designated Shelf Registration) file
or effect a registration statement of the type for which it would be
entitled to declare a Section 6(b) Period.
7. REGISTRATION PROCEDURES. If and whenever the Company is
required to use commercially reasonable efforts to effect or cause the
registration of any Registrable Securities under the Securities Act as
provided in this Agreement, the Company will, as expeditiously as
possible:
(a) prepare and file with the SEC a Registration
Statement with respect to such Registrable Securities on any form for
which the Company then qualifies or which counsel for the Company shall
deem appropriate, and which form shall be available for the sale of the
Registrable Securities in accordance with the intended methods of
distribution thereof, and use its best efforts to cause such Registration
Statement to become and remain effective;
(b) prepare and file with the SEC amendments and post-
effective amendments to such Registration Statement and such amendments
and supplements to the Prospectus used in connection therewith as may be
necessary to maintain the effectiveness of such registration or as may be
required by the rules, regulations or instructions applicable to the
registration form utilized by the Company or by the Securities Act or
rules and regulations thereunder for shelf registration or otherwise
necessary to keep such Registration Statement effective for up to 90 days
(except to the extent otherwise provided in Section 4(b) with respect to
a Designated Shelf Registration) and cause the Prospectus as so
supplemented to be filed pursuant to Rule 424 under the Securities Act,
and to otherwise comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by such
Registration Statement until the earlier of (x) such 90th day (except to
the extent otherwise provided in Section 4(b) with respect to a
Designated Shelf Registration) and (y) such time as all Registrable
Securities covered by such Registration Statement have ceased to be
Registrable
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Securities (it being understood that the Company at its option may
determine to maintain such effectiveness for a longer period, whether
pursuant to a Shelf Registration or otherwise); PROVIDED that a
reasonable time before filing a Registration Statement or Prospectus, or
any amendments or supplements thereto (other than reports required to be
filed by it under the Exchange Act and the rules and regulations adopted
by the SEC thereunder), the Company will furnish to the Holders, the
managing underwriter and their respective counsel for review and comment,
copies of all documents proposed to be filed and will not file any such
documents (other than as aforesaid) to which any of them reasonably
object prior to the filing thereof;
(c) furnish to each Holder of such Registrable Securities
such number of copies of such Registration Statement and of each
amendment and post-effective amendment thereto (in each case including
all exhibits), any Prospectus or Prospectus supplement and such other
documents as such Holder may reasonably request in order to facilitate
the disposition of the Registrable Securities by such Holder (the Company
hereby consenting to the use (subject to the limitations set forth in the
last paragraph of this Section 7) of the Prospectus or any amendment or
supplement thereto in connection with such disposition);
(d) use its best efforts to register or qualify such
Registrable Securities covered by such Registration Statement under such
other securities or blue sky laws of such jurisdictions as each Holder
shall reasonably request, and do any and all other acts and things which
may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in such jurisdictions of the Registrable
Securities owned by such Holder, except that the Company shall not for
any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction where, but for the requirements
of this Section 7(d), it would not be obligated to be so qualified, to
subject itself to taxation in any such jurisdiction, or to consent to
general service of process in any such jurisdiction;
(e) notify each Holder of any such Registrable Securities
covered by such Registration Statement, at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act
within the appropriate period mentioned in Section 7(b), of the Company's
becoming aware that the Prospectus included in such Registration
Statement, as then in effect, includes an untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
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circumstances then existing, and at the request of any such Holder,
prepare and furnish to such Holder a reasonable number of copies of an
amendment or supplement to such Registration Statement or related
Prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such Prospectus shall not
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing;
(f) notify each Holder of Registrable Securities covered
by such Registration Statement at any time,
(1) when the Prospectus or any Prospectus supplement
or post-effective amendment has been filed, and, with respect to the
Registration Statement or any post-effective amendment, when the
same has become effective;
(2) of any request by the SEC for amendments or
supplements to the Registration Statement or the Prospectus or for
additional information;
(3) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or any
order preventing the use of a related Prospectus, or the initiation
or any overt threats of any proceedings for such purposes;
(4) of the receipt by the Company of any written
notification of the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction or the
initiation or any overt threats of any proceeding for that purpose;
and
(5) if at any time the representations and warranties
of the Company contemplated by paragraph(i)(1) below cease to be
true and correct;
(g) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders an earnings statement which shall satisfy the provisions
of Section 11(a) of the Securities Act, provided that the Company shall
be deemed to have complied with this paragraph if it has complied with
Rule 158 under the Securities Act;
(h) use commercially reasonable efforts to cause all such
Registrable Securities to be listed on any securities exchange on which
the TWX Common Stock is then listed, if such Registrable Securities are
not already so
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listed and if such listing is then permitted under the rules of such
exchange, and to provide a transfer agent and registrar for such
Registrable Securities covered by such Registration Statement no
later than the effective date of such Registration Statement;
(i) enter into agreements (including underwriting
agreements) and take all other appropriate and all commercially
reasonable actions in order to expedite or facilitate the disposition of
such Registrable Securities and in such connection, whether or not an
underwriting agreement is entered into and whether or not the
registration is an underwritten registration:
(1) make such representations and warranties to the
Holders of such Registrable Securities and the underwriters, if any,
in form, scope and substance as are customarily made by issuers to
underwriters in firm commitment underwritten offerings;
(2) obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing
underwriters, if any, and the Holders of a majority in number of the
Registrable Securities being sold) addressed to such Holders and the
underwriters covering the matters customarily covered in opinions
requested in firm commitment underwritten offerings and such other
matters as may be reasonably requested by the Holders of a majority
in number of the Registrable Securities being sold and the managing
underwriter, if any;
(3) obtain "cold comfort" letters and updates thereof
from the Company's independent certified public accountants
addressed to the selling Holders of Registrable Securities and the
underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort"
letters by independent accountants in connection with firm
commitment underwritten offerings on such date or dates as may be
reasonably requested by the Holder of a majority in number of the
Registrable Securities being sold and the managing underwriter, if
any;
(4) if requested, provide indemnification in
accordance with the provisions and procedures of Section 10 hereof
to all parties to be indemnified pursuant to said Section; and
(5) deliver such documents and certificates as may be
reasonably requested by the
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Holders of a majority in number of the Registrable Securities
being sold and the managing underwriters, if any, to evidence
compliance with clause (f) above and with any customary
conditions contained in the underwriting agreement or
other agreement entered into by the Company (the matters set forth
in this Section 7(i) to be effected at each closing under any
underwriting or similar agreement as and to the extent required
thereunder);
(j) cooperate with the Holders of Registrable Securities
covered by such Registration Statement and the managing underwriter or
underwriters or agents, if any, to facilitate, to the extent commercially
reasonable under the circumstances, the timely preparation and delivery
of certificates (not bearing any restrictive legends) representing the
securities to be sold under such Registration Statement, and enable such
securities to be in such denominations and registered in such names as
the managing underwriter or underwriters or agents, if any, or such
Holders may request;
(k) if reasonably requested by the managing underwriter
or underwriters or a Holder of Registrable Securities being sold in
connection with an underwritten offering, incorporate in a Prospectus
supplement or post-effective amendment such information as the managing
underwriters and the Holders of a majority in number of the Registrable
Securities being sold agree should be included therein relating to the
plan of distribution with respect to such Registrable Securities,
including, without limitation, information with respect to the principal
amount of Registrable Securities being sold to such underwriters, the
purchase price being paid therefor by such underwriters and with respect
to any other terms of the underwritten offering of the Registrable
Securities to be sold in such offering and make all required filings of
such Prospectus supplement or post-effective amendment promptly upon
being notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment;
(l) make available for inspection by any Holder of
Registrable Securities included in such Registration Statement, any
underwriter participating in any disposition pursuant to such
Registration Statement and any attorney, accountant or other agent
retained by any such Holder or underwriter (collectively, the "Inspectors"),
reasonable access to appropriate officers of the Company and the Company's
subsidiaries to ask questions and to obtain information reasonably
requested by any such Inspector and all financial and other records and
other information, pertinent corporate documents and properties of any of
the Company and its subsidiaries and affiliates (collectively,
Page 15
the "Records"), as shall be reasonably necessary to enable
them to exercise their due diligence responsibility; PROVIDED, HOWEVER,
that the Records that the Company determines, in good faith, to be
confidential and which it notifies the Inspectors in writing are
confidential shall not be disclosed to any Inspector unless such
Inspector signs a confidentiality agreement reasonably satisfactory to
the Company and either (i)the disclosure of such Records is necessary to
avoid or correct a misstatement or omission of a material fact in such
Registration Statement or (ii)the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction; PROVIDED FURTHER, HOWEVER, that any decision regarding the
disclosure of information pursuant to subclause (i) shall be made only
after consultation with counsel for the applicable Inspectors. Each
Holder of Registrable Securities agrees that it will, promptly after
learning that disclosure of such Records is sought in a court having
jurisdiction, give notice to the Company and allow the Company, at the
Company's expense, to undertake appropriate action to prevent disclosure
of such Records; and
(m) in the event of the issuance of any stop order
suspending the effectiveness of the Registration Statement or of any
order suspending or preventing the use of any related Prospectus or
suspending the qualification of any Registrable Securities included in
the Registration Statement for sale in any jurisdiction, the Company will
use all commercially reasonable efforts promptly to obtain its
withdrawal.
The Company may require each Holder of Registrable Securities
as to which any registration is being effected to furnish the Company
with such information regarding such Holder and pertinent to the
disclosure requirements relating to the registration and the distribution
of such securities as the Company may from time to time reasonably
request in writing.
Each Holder of Registrable Securities agrees that, upon receipt
of any notice from the Company of the happening of any event of the kind
described in Section 7(e), such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the Prospectus or
Registration Statement covering such Registrable Securities until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 7(e), and, if so directed by the Company, such
Holder will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies then in such Holder's possession, of the
Prospectus covering such Registrable Securities current at the time of
receipt of such notice. In the event the Company shall give any such
notice, the Effective Period
Page 16
and, in the case where the use of an effective Registration Statement (other
than a Designated Shelf Registration) or any related Prospectus is prohibited
under Section 7(e), the period mentioned in Section 7(b), as the case may be,
shall be extended by the number of days during the period from the date of
the giving of such notice pursuant to Section 7(e) and through the date when
each seller of Registrable Securities covered by such Registration
Statement shall have received the copies of the supplemented or amended
Prospectus contemplated by Section 7(e) (except that, in the case of such
a prohibition during the effectiveness of a Designated Shelf
Registration, the Effective Period will only be extended to the extent
necessary to comply with Section 4(b)).
8. REGISTRATION EXPENSES. The Company will pay all
Registration Expenses in connection with all registrations of Registrable
Securities pursuant to Sections 3 and 4 upon the written request of any
of the Holders, and each Holder shall pay (x) any fees or disbursements
of counsel to such Holder (other than Counsel to the Holders) and (y) all
underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable
Securities pursuant to the Registration Statement.
9. REPORTS UNDER THE EXCHANGE ACT. The Company agrees to:
(a) file with the SEC in a timely manner all reports and
other documents required of the Company under the Exchange Act, and
(b) furnish to any Holder, during the Effective Period,
forthwith upon request (A)a written statement by the Company that it has
complied with the current public information and reporting requirements
of Rule 144 under the Securities Act and the Exchange Act and (B)a copy
of the most recent annual or quarterly report of the Company and such
other reports and documents so filed by the Company.
10. INDEMNIFICATION; CONTRIBUTION.
(a)INDEMNIFICATION BY THE COMPANY. The Company agrees
to indemnify and hold harmless each Holder of Registrable Securities, its
officers and directors and each Person who controls such Holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act), and any agent or investment adviser thereof against all
losses, claims, damages, liabilities and expenses (including reasonable
attorneys' fees and expenses) incurred by such party pursuant to any
actual or threatened
Page 17
action, suit, proceeding or investigation arising out of or based
upon (i)any untrue or alleged untrue statement of material fact
contained in the Registration Statement, any Prospectus or preliminary
Prospectus, or any amendment or supplement to any of the foregoing
or (ii)any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein (in the case of a Prospectus or a preliminary
Prospectus, in light of the circumstances then existing) not misleading,
except in each case insofar as the same arise out of or are based upon
any such untrue statement or omission made in reliance on and in
conformity with information with respect to such indemnified party
furnished in writing to the Company by such indemnified party or its
counsel expressly for use therein. In connection with an underwritten
offering, the Company will indemnify the underwriters thereof, their
officers, directors and agents and each Person who controls such
underwriters (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) to the same extent as provided above with
respect to the indemnification of the Holders of Registrable Securities.
Notwithstanding the foregoing provisions of this Section 10(a), the
Company will not be liable to any Holder of Registrable Securities, any
Person who participates as an underwriter in the offering or sale of
Registrable Securities or any other Person, if any, who controls such
Holder or underwriter (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act), under the indemnity agreement in
this Section10(a) for any such loss, claim, damage, liability (or action
or proceeding in respect thereof) or expense that arises out of such
Holder's or other Person's failure to send or deliver a copy of the final
Prospectus to the Person asserting an untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the written
confirmation of the sale of the Registrable Securities to such Person if
such statement or omission was corrected in such final Prospectus and the
Company has previously furnished copies thereof to such Holder or other
Person in accordance with this Agreement.
(b) INDEMNIFICATION BY HOLDERS OF REGISTRABLE SECURITIES.
In connection with the Registration Statement, each Holder will furnish
to the Company in writing such information, including the name, address
and the amount of Registrable Securities held by such Holder, as the
Company reasonably requests for use in such Registration Statement or the
related Prospectus and agrees to indemnify and hold harmless (in the same
manner and to the same extent as set forth in Section 10(a)) the Company,
all other Holders or any underwriter, as the case may be, and any of
their respective affiliates, directors, officers and controlling Persons
(within the meaning of Section 15 of the
Page 18
Securities Act or Section 20 of the Exchange Act), against any
losses, claims, damages, liabilities and expenses resulting from
any untrue or alleged untrue statement of a material fact contained
in, or any omission or alleged omission of a material fact required
to be stated in, such Registration Statement or Prospectus or any
amendment or supplement to either of them or necessary to make the
statements therein (in the case of a Prospectus, in the light of
the circumstances then existing) not misleading, but only to the
extent that any such untrue statement or omission is made in reliance on
and in conformity with information with respect to such Holder furnished
in writing to the Company by such Holder or its counsel specifically for
inclusion therein.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person
entitled to indemnification hereunder agrees to give prompt written
notice to the indemnifying party after the receipt by such indemnified
party of any written notice of the commencement of any action, suit,
proceeding or investigation or threat thereof made in writing for which
such indemnified party may claim indemnification or contribution pursuant
to this Section 10 (provided that failure to give such notification shall
not affect the obligations of the indemnifying party pursuant to this
Section 10 except to the extent the indemnifying party shall have been
actually prejudiced as a result of such failure). In case any such
action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under these indemnification
provisions for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation, unless in the reasonable judgment of any indemnified party
a conflict of interest is likely to exist between such indemnified party
and any other of such indemnified parties with respect to such claim, in
which event the indemnifying party shall be obligated to pay the
reasonable fees and expenses of such additional counsel or counsels. No
indemnifying party, in defense of any such action, suit, proceeding or
investigation, shall, except with the consent of each indemnified party,
consent to the entry of any judgment or entry into any settlement which
Page 19
does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all
liability in respect to such action, suit, proceeding or investigation to
the extent the same is covered by the indemnity obligation set forth in
this Section 10. No indemnified party shall consent to entry of any
judgment or enter into any settlement without the consent of each
indemnifying party.
(d) CONTRIBUTION. If the indemnification from the
indemnifying party provided for in this Section 10 is unavailable to an
indemnified party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then the indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages, liabilities and expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying party
and indemnified party in connection with the actions which resulted in
such losses, claims, damages, liabilities and expenses, as well as any
other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference
to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact, has been made by, or relates
to information supplied by, such indemnifying party or indemnified party,
and the parties, relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or
payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 10(c), any legal and
other fees and expenses reasonably incurred by such indemnified party in
connection with any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 10(d) were determined
by pro rata allocation or by any other method of allocation which does
not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this
Section 10(d), no underwriter shall be required to contribute any amount
in excess of the amount by which the total price at which the Registrable
Securities underwritten by it and distributed to the public were offered
to the public exceeds the amount of any damages which such underwriter
has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
Page 20
the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. Each Holder's
obligation to contribute is several in the proportion that the proceeds
of the offering received by such Holder bears to the total proceeds of
the offering, and not joint.
If indemnification is available under this Section10, the
indemnifying parties shall indemnify each indemnified party to the full
extent provided in Section10(a) or (b), as the case may be, without
regard to the relative fault of said indemnifying parties or indemnified
party or any other equitable consideration provided for in this Section
10(d).
(e) LIMITATION ON LIABILITY AND CONTRIBUTION OF A HOLDER.
In no event shall any Holder of Registrable Securities be liable or
required to contribute any amount under this Section 10 or otherwise in
respect of any untrue or alleged untrue statement or omission or alleged
omission for amounts in excess of the amount by which the total price at
which the Registrable Securities of such Holder were offered to the
public exceeds the amount of any damages which such Holder has otherwise
been required to pay by reason of such untrue statement or omission.
(f) The provisions of this Section 10 shall be in
addition to any liability which any indemnifying party may have to any
indemnified party and shall survive the termination of this Agreement.
11. PARTICIPATION IN UNDERWRITTEN OFFERINGS. No
Holder of Registrable Securities may participate in any underwritten
offering hereunder unless such Holder (a)agrees to sell such Holder's
securities on the basis provided in any underwriting arrangements
approved by the Company in its reasonable discretion and (b) completes
and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the
terms of such underwriting arrangements.
12. MISCELLANEOUS.
(a)REMEDIES. Each Holder of Registrable Securities in
addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance
of its rights under this Agreement.
(b) AMENDMENTS AND WAIVERS. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or
Page 21
consents to departures from the provisions hereof may not be given, unless
the Company has obtained the written consent of Holders of at least a
majority in number of the Registrable Securities then outstanding.
(c) NOTICES. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing
proof of delivery) to the parties at the following addresses (or at such
other address for any party as shall be specified by like notice).
(i)(A) Itochu Corporation
0-0, Xxxx-Xxxxxx 0-xxxxx
Xxxxxx-xx, Xxxxx 000-00, Xxxxx
Facsimile: 00-0-0000-0000
Attention: S. Xxx
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxx
(B) if to Itochu Entertainment to:
Itochu Entertainment Inc.
00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxx
Page 22
with a copy (which shall not constitute notice) to:
Itochu Corporation
0-0, Xxxx-Xxxxxx 0-xxxxx
Xxxxxx-xx, Xxxxx 000-00, Xxxxx
Facsimile: 00-0-0000-0000
Attention: S. Xxx
Xxxxx Polk & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxx
(C) if to a Holder of Registrable Securities, other than a
Stockholder, at the address of such Holder as such Holder may
designate to the Company in writing; and
(ii) if to the Company to:
Time Warner Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxx, General Counsel
with a copy (which shall not constitute notice) to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure
to the benefit of and be binding upon the parties hereto, any Holder
other than a Stockholder and any successors thereof; PROVIDED, HOWEVER,
that (i)any Holder (other than a Stockholder) shall have agreed in
writing to become a Holder under this Agreement and to be bound by the
terms and conditions hereof and (ii)subject to clause (i), this
Agreement and the provisions of this Agreement that are for the benefit
of the Holders shall not be assignable by any Holder to any Person that
is not so permitted to be a Holder, and any such purported assignment
shall be null and void.
Page 23
(e) COUNTERPARTS. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties.
(f) DESCRIPTIVE HEADINGS. The descriptive headings used
herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement.
(g) GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York,
regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
(h) SEVERABILITY. In the event that any one or more of
the provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions
contained herein shall not be in any way impaired thereby and that all
remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the
Stockholders shall be enforceable to the fullest extent permitted by law.
(i) ENTIRE AGREEMENT. This Agreement is intended by the
parties as a final expression and a complete and exclusive statement of
the agreement and understanding of the parties hereto in respect of the
subject matter hereof. There are no restrictions, promises, warranties
or undertakings with respect to the subject matter hereof, other than
those set forth or referred to herein and therein. This Agreement
supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
TIME WARNER INC.
By:/s/ Xxxxxxx X. Xxxx
------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
ITOCHU CORPORATION
By:/s/ Xxxxxx Xxxxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxxxx
Title: President and
Chief Executive Officer
ITOCHU ENTERTAINMENT INC.
By:/s/ Xxxxxx Xxxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxxx
Title: President
